Climate tech investments are growing again and AI is leading the transformation in 2025
Investments in climate technology came back in full force in 2025, and the numbers leave no room for doubt: the global venture capital and growth investment market rose 8% last year, moving an impressive $40.5 billion after two consecutive years of decline, according to data from Sightline Climate.
And there is more: 179 funds raised a combined $92 billion in new capital, setting an all-time record for the sector. A big part of this turnaround happened after the federal government approved the One Big Beautiful Bill Act, making it clearer which policies would be prioritized — finally unlocking a flood of capital that had been stuck in wait-and-see mode.
But what really changed the game this time around was artificial intelligence.
Nearly 28 cents of every dollar invested in climate went straight to solutions with AI at the core, and data centers alone attracted around $2 billion.
That is no coincidence.
AI has gone from being a nice-to-have to an essential component for anyone looking to solve the planet’s most pressing problems in a scalable and efficient way 🌍.
Three major areas are driving this movement right now:
- Sustainable data centers, which need to grow without destroying natural resources
- Materials innovation, focused on critical minerals like copper and lithium, which could face projected shortfalls of 30 to 40% by 2035
- Climate adaptation, which has shifted from an environmental talking point to a real operational risk for companies worldwide — with funding rising 64% over the past year
It was within this landscape that Trellis analyzed 105 startups and selected the 15 most promising ones to watch in 2026. A team of analysts evaluated each candidate on four criteria: solution innovation, commercial traction, impact potential, and founding team strength. Five finalists were chosen in each of the three categories.
Below, you will get to know each one of them and understand why they are on the radar of the world’s biggest investors 🚀.
Why AI has become the heart of climate technology
For a long time, discussions about sustainability and climate were limited to public policies, solar panels, and net-zero targets. But what is happening now is different, and a lot more interesting. Artificial intelligence entered this equation not as a tech gimmick, but as the primary tool for making climate solutions financially viable and operationally scalable.
Machine learning models can, for example, predict energy consumption patterns in data centers with a level of precision that no human team could achieve manually, and that translates directly into less waste and more efficiency. When you apply that at a global scale, the impact is massive.
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Another factor behind this growth is the pressure companies are facing from investors and regulators at the same time. It is no longer acceptable to grow without considering environmental impact, and whoever does not adapt will fall behind — both in reputation and in financial results. The startups that combine AI with climate technology landed right in that gap: they offer a technical and measurable answer to a problem that until recently seemed impossible to solve with precision. And the investments flowing in confirm that the market sees this as a real opportunity, not a passing ESG trend.
On top of that, the convergence of generative AI, satellite-based remote sensing, and real-time data analytics has created a toolkit that simply did not exist five years ago. Startups can now monitor carbon emissions on rural properties with the same precision that major corporations use to audit their supply chains. This technological leveling is what is making the climate tech ecosystem so vibrant and, most importantly, so attractive to venture capital willing to bet on the long term.
The 15 startups Trellis chose for 2026
The methodology Trellis used to build this list was far from random. Out of 105 companies analyzed, the criteria combined innovation capacity, proven commercial traction, measurable climate impact potential, and founding team strength. It was not enough to be a green company with a cool product — startups had to demonstrate that their technology can scale and deliver verifiable results. That filter eliminated many startups with a great pitch but little technical substance behind it.
What remained is a group that faithfully represents where the climate tech market is placing its bets in the coming years. The five finalists in each category would also have the opportunity to deliver live pitches in virtual competitions organized by Trellis, with real-time questions from investors — data centers on May 20, materials on May 27, and climate adaptation on June 3.
Category 1 — Sustainable data centers
The first group of five startups is focused on sustainable data infrastructure, meaning companies developing solutions so data centers consume less energy, use water more intelligently, and run on renewable sources efficiently. This segment attracted the most capital in 2025, and it is not hard to see why: the demand for computing power is growing exponentially because of AI itself, creating a paradox that needs to be solved.
WAVR Technologies
WAVR Technologies might be the most creative startup on this list. It generates water from the atmosphere using residual heat from AI data centers. Instead of wasting that thermal energy, the company redirects it into a process that captures moisture from the air, producing water that can be used to cool the facilities themselves. CEO Rich Sloan leads the operation.
Airloom Energy
Airloom Energy develops modular wind systems designed to power data centers, energy utilities, and defense operations. The idea is to provide renewable energy generation at a smaller and more flexible scale than traditional massive wind turbines, making installation easier in locations where space is limited. Neal Rickner is the CEO.
etalytics
etalytics uses artificial intelligence software to reduce energy waste in data center cooling systems while cutting down the need for manual operations. The company directly targets one of the biggest energy drains in these facilities: keeping servers at the right temperature. Niklas Panten is co-founder and CEO.
Aikido Technologies
Aikido Technologies builds floating data centers on the open ocean. The concept is radical — using ocean water as a natural cooling system and positioning computing infrastructure away from urban centers, where land is increasingly scarce and expensive. Sam Kanner leads the company as CEO.
Magnefy
Magnefy combines artificial intelligence with magnetic sensing to detect electrical faults in transformers and inverters. This type of predictive monitoring prevents unplanned downtime and can save millions in damaged equipment. Joseph Kao is co-founder and CEO.
Category 2 — Materials innovation and critical minerals
The second group brings together startups focused on materials innovation and responsible mining. The energy transition depends on minerals like lithium, copper, cobalt, and rare earth elements, and projected shortages of up to 30 to 40% of these resources by 2035 present a problem with no simple fix — one that has become both a climate issue and a matter of national security.
Aepnus Technology
Aepnus Technology developed a method to convert industrial waste into useful chemicals for the mining, battery, textile, and paper industries. Instead of discarding tons of byproducts, the company closes the loop by turning waste into raw materials. Lukas Hackl is CEO and co-founder.
Elementium Materials
Elementium Materials works on developing substitute electrolytes that improve battery performance without relying on scarce raw materials. The promise is a component that can be integrated directly into existing production lines — a true drop-in solution — without requiring structural changes to manufacturing processes. Gustavo Hobold serves as CTO.
Smart Plastic Technologies
Smart Plastic Technologies creates additives for plastics that maintain the material’s performance during its useful life but allow bioassimilation when discarded. It is an approach that tries to solve the plastic problem at the end of its lifecycle without compromising functionality during use. Sumathi Pakki is the company’s CSO.
REEgen
REEgen uses engineered microbes to recover critical minerals from industrial waste. It is a biological and less aggressive way of extracting rare earth elements and other valuable minerals that would normally be lost in industrial refuse. Alexa Schmitz is co-founder and CEO.
EnKoat
EnKoat develops advanced thermal coatings that extend the lifespan of commercial roofs and reduce building energy demand. The coatings function as thermal barriers, keeping indoor temperatures more stable and reducing the load on HVAC systems. Matthew Aguayo is co-founder and CEO.
Category 3 — Climate adaptation
The third group is made up of climate adaptation companies that help cities, insurers, farmers, and infrastructure businesses prepare for the already unavoidable impacts of climate change. Funding for adaptation grew 64% in 2025, confirming that investors and buyers have realized that a hotter planet represents significant operational risk.
Beehive
Beehive is an AI platform that helps companies prepare for natural disasters, respond to emergencies, and automate climate risk reporting. It is the kind of tool that transforms raw data into practical action, offering visibility into risks that many organizations still manage manually and reactively. Adriel Lubarsky is the CEO.
Helix Earth
Helix Earth removes moisture before it reaches a building’s cooling system, reducing air conditioning energy consumption while simultaneously improving indoor air quality. Rawand Rasheed is co-founder and CEO.
California Cultured
California Cultured produces coffee and chocolate at industrial scale through plant cell biomanufacturing. The goal is to decouple the production of these foods from agricultural regions that are increasingly vulnerable to extreme weather events like prolonged droughts and heat waves. Alan Perlstein leads as CEO.
Nucleic Sensing Systems
Nucleic Sensing Systems develops autonomous biosensors that monitor water quality and detect harmful biological signals in real time. The technology can be deployed in rivers, reservoirs, and water supply systems, functioning as an early warning system for contamination.
Sensegrass
Sensegrass provides soil intelligence sensors and AI-powered agronomy tools that help farmers optimize their harvests and build climate resilience. Lalit Gautam is the CEO.
Sustainable data centers: the paradox that became an opportunity
There is a pretty obvious irony in this whole story: artificial intelligence, the main ally of climate solutions, is also one of the planet’s biggest energy consumers. Training a large language model like the ones behind the most popular AI assistants can use as much electricity as hundreds of homes consume in an entire year. This created an urgent problem for the tech industry, and the smartest startups saw a business opportunity that goes well beyond environmental messaging — it is an operational and economic necessity that every tech company will need to address in the coming years.
The startups operating in this space work across very different fronts. Some develop modular wind power systems, like Airloom Energy. Others create mechanisms to repurpose residual heat, like WAVR Technologies. There are also companies focused on software optimization, like etalytics, which uses AI to distribute workloads and reduce waste in cooling systems. Aikido Technologies goes even further, taking entire data centers out to sea. All of these approaches converge toward the same goal: making sure data center growth does not necessarily mean a proportional increase in environmental impact.
What makes this market especially interesting for investors is that it brings together two megatrends at once — the explosive growth of AI and the increasing pressure for sustainability. Companies like Microsoft, Google, and Amazon have already made public commitments to operate on 100% renewable energy, and that creates enormous demand for suppliers that can deliver technical solutions at the level of those commitments. The startups selected by Trellis in this category are well positioned to capture a meaningful share of this market, especially since the pace of global data center expansion shows no signs of slowing down.
Critical minerals and the race for the materials of the future
The transition to a low-carbon economy depends on a quantity of minerals that the world has not yet learned to produce sustainably and at sufficient scale. Lithium for batteries, copper for electrical grids, cobalt for energy cells — all of these materials are indispensable for the future everyone wants, but the way they are extracted today still carries an environmental and social cost too high to ignore. It is within this tension that materials innovation startups found their space, using artificial intelligence and computational simulation to rewrite the rules of this game.
One of the most fascinating applications in this field is the use of engineered microbes, like REEgen does, to recover critical minerals from industrial waste. Another front is Aepnus Technology, which transforms industrial waste into chemicals for multiple industries. Elementium Materials works at the other end, developing electrolytes that improve batteries without depending on scarce raw materials. This kind of work, which would have taken decades in a lab before, is now moving at an accelerated pace thanks to computational chemistry combined with machine learning.
What connects all these initiatives is the awareness that there is no energy transition without solving the materials bottleneck. It does not help to build more wind turbines and solar panels if the minerals needed to produce them run short or if extracting them destroys entire ecosystems in the process. The smartest startups in this segment are tackling the problem end to end — from discovery and extraction to reuse and recycling — creating more closed-loop systems that are less dependent on new extraction.
Climate adaptation: when environmental risk becomes business risk
For a long time, talking about climate adaptation felt like something distant, a problem for future generations or geographically vulnerable regions. That scenario has shifted quite abruptly. Insurers are recalculating risk across entire regions because of more frequent floods and droughts. Supermarket chains are dealing with supply chain disruptions from extreme weather events. Entire cities need to redesign their infrastructure to handle heat waves that used to be rare and are now annual. Climate adaptation has moved beyond the environmental conference agenda and become a mandatory item in the strategic planning of any company operating at meaningful scale.
The startups working in this space use artificial intelligence primarily for one thing: anticipation. Beehive, for example, combines climate data with predictive models to help companies prepare before disasters strike — and to automate climate risk report generation. Nucleic Sensing Systems monitors water quality in real time with autonomous biosensors. Sensegrass delivers soil intelligence so farmers can make data-driven decisions instead of relying on gut feeling. Knowing in advance where risk is going to increase allows for better decisions about where to invest, where to protect, and where to redirect resources before the problem arrives.
Another important angle in this market is food and urban resilience. California Cultured, for example, is decoupling coffee and chocolate production from the most climate-vulnerable agricultural regions using plant cell biomanufacturing. Helix Earth tackles building energy efficiency in an original way, removing moisture before it overloads air conditioning systems. These approaches may seem small in isolation, but together they form a robust ecosystem of solutions for a planet that is getting hotter and less predictable every year.
In 2026, smart money is flowing to where AI and climate intersect — and the 15 startups on the Trellis list are a pretty accurate map of where that intersection is generating the most real value.
What is happening is not a bubble or a fad. It is the convergence of three forces that rarely align at the same time: real urgency, because the consequences of climate change are increasingly visible and costly; mature technology, because AI has reached a level of capability that allows it to solve problems that were previously intractable; and available capital, with $92 billion raised by specialized funds ready to bet on the best solutions. When these three elements come together, the result tends to be a market transformation that goes far beyond what any report can predict. 🌱
